Himself cannot pay himself

The word wrangling between Marvin Gonzales and Barry Padarath, the former and current public utilities ministers, over the staggering debt owed to the National Gas Company by T&TEC is political sound and fury, demanding more decisive action.

T&TEC owes $7 billion to NGC for providing natural gas for its turbines, a debt that increases by $900 million annually.

The electricity utility is also owed cumulative debt of more than $2 billion by other state agencies.

T&TEC is not alone in this circle of interconnected governance debts.

In 2024, Mr Gonzales told Parliament that WASA was owed a total of $146 million by other state agencies.

This Ouroboros of losses is further underwritten by an unrealistic commitment to subsidy that isn't supported by accounting realities.

TT has the third lowest cost for fuel in the region, but it also has the lowest cost for electricity, one-sixth that of the Caribbean average.

The Regulated Industries Commission (RIC) considered a T&TEC proposal to adjust its rates to align the cost of electricity production and delivery with the revenue it collects through a measured increase in the cost of electricity.

In 2023, the RIC announced the results of its deliberations into the price adjustments requested by T&TEC and it did not go down well.

The rate adjustments were sensibly weighted in favour of individuals, with hikes of greater than 100 per cent reserved for industrial customers at the steep end of the consumption curve.

Subsidy is inevitably part of the government's support of its less capable citizens, but heavy industries shouldn't be part of that matrix.

If T&TEC had chosen to use the maximum increases suggested by the commission, it would have increased revenues by more than 30 per cent, but the issue became moot when the government lost the political will to implement any of its recommendations.

Any pretence of implementing the recommendations of the commission to balance T&TEC's books have come to a summary end under Mr Paradath's governance.

Unsurprisingly, Mr Padarath, who has objected to the rate hike since discussions began in 2022, has dismissed the debt as an unfortunate inheritance of the past administration.

He spoke of a "payment plan" to resolve the issue, but without an increase in revenue for T&TEC, it's unclear how either the debt can be settled or how the continuing flow of red ink at the utility can be stalled.

Mr Gonzales' attacks and Mr Padarath's contemptuous responses aren't offering any real solutions to an apparently intractable issue.

That issue isn't the rolling debts owed to key state utilities, it's the unwillingness of successive governments to make any serious effort to balance the books of their ministries and state agencies.

Mr Padarath faces the unenviable challenge of balancing political capital with the hard math of accounting.